This paper seeks to explain changes and continuity in the developmental welfare states in the Republic of Korea (Korea) and China (Taiwan Province) within the East Asian context.

The paper first elaborates two strands of welfare developmentalism (selective versus inclusive) and establishes that both Korea and China (Taiwan Province) fell into the selective category of developmental welfare states before the Asian economic crisis of 1997–1998. The key principles of the selective strand of welfare developmentalism are productivism, selective social investment and authoritarianism; inclusive welfare development is based on productivism, universal social investment and democratic governance.

The paper then argues that policy reform toward an inclusive welfare state in Korea and China (Taiwan Province) was triggered by the need for structural reform in the economy. The need for economic reform, together with democratization, created institutional space in policy making for advocacy coalitions, which made successful advances toward greater social rights. Finally, the paper argues that the experiences of Korea and China (Taiwan Province) counter the neoliberal assertion that the role of social policy is minor in economic development, and emphasizes that the idea of an inclusive developmental welfare state should be explored in the wider context of economic and social development.